MARTINLEWIS Why a good idea can cost you dear

calculations it turned out he was selling the goods for less than half the total cost to him.

Unsurprisingly his bank balance was eroding too, but he’d ignored that because “people like it”. This wasn’t a business, it was a charity.

He couldn’t cut his costs, and putting the price up killed the sales. The business reality had been eclipsed by the blinding light of the good idea.

This extreme example, serves a common point. You must always do the numbers, and do them conservatively. Mates liking the idea doesn’t count as market research. Friends want to please. That’s not the same as a mass of strangers putting their hands in their pockets to pay for something.

Examine the downside risks. Calculate what would happen if you halved predicted sales and revenues, and doubled all costs. And factor in the cost of your own labour. If it only makes money if you work for free, it isn’t a longterm business. Even businesses that succeed tend not to do it so quickly. Often, when starting out, you twiddle your thumbs waiting for others who don’t have the same time pressures.

So if you have freelance-able skills from your existing work, whether as a teacher, a salesperson, consultant, builder or owt else – that’s an asset.

Consider if it’s possible to split your time, to say, two days a week freelancing and three on the business (in reality, if you’re as obsessed as I was when I started, that means every other waking second – and a notebook by the bed to boot).

Then, instead of your enterprise needing to be able to pay you enough to live off after six months, it may have a couple of years to blossom.